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PETITIONER: SMT. SARABATI DEVI & ANR.

       Vs.

RESPONDENT: SMT. USHA DEVI

DATE OF JUDGMENT06/12/1983

BENCH: VENKATARAMIAH, E.S. (J) BENCH: VENKATARAMIAH, E.S. (J) MISRA, R.B. (J)

CITATION:  1984 AIR  346            1984 SCR  (1) 992  1984 SCC  (1) 424        1983 SCALE  (2)869  CITATOR INFO :  RF         1986 SC1863  (49)

ACT:      Insurance Act,  1938 (Act  IV  of  1938),  Section  39- Assured of  a life  insurance policy  dies intestate leaving behind him  his mother,  his widow,  and a  son, but for the purpose of  Section 39 has nominated his widow alone-Whether the nominee of a life insurance policy, on the assured dying intestate would  become entitled  to the beneficial interest in the  amount received under the policy to the exclusion of the heirs of the assured.

HEADNOTE:      The appellants  being mother  and son  of one  Jagmohan Swarup who  was governed  by the  Hindu Succession Act, 1956 and who died intestate on June 15, 1967 filed Civil Suit No. 122 of 1970 on the file of the first Additional Civil Judge, Dehradun for  a declaration  to the  effect that  they  were together entitled  to 2/3rd  share of  the  amount  due  and payable under  the insurance  policies though  the  deceased assured has nominated the respondent his widow as the person to whom  the amounts  were payable. The respondent contested the suit  claiming that  she has  the absolute  right to the amounts to  the exclusion  of her son and her mother-in-law. The suit  was dismissed.  The First  Appeal before  the  Dt. Judge, Dehradun  and the Second Appeal before the High Court were dismissed.  Hence the  appeal after  obtaining  special leave of the Court.      Allowing the appeal, the Court, ^      HELD: 1.1  A mere  nomination made  under Section 39 of the  Insurance  Act,  1938  does  not  have  the  effect  of conferring on  the nominee  any beneficial  interest in  the amount payable  under the life insurance policy on the death of the accused. The nomination only indicates the hand which is authorised to receive the amount, on the payment of which the insurer  gets a  valid discharge  of its liability under the policy. The amount, however, can be claimed by the heirs of the  assured in  accordance with  the law  of  succession governing them. [1009G, 1004 B-D]      1.2 An  analysis of the provisions of Section 39 of the Act clearly  established that the policy holder continues to

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hold interest  in the  policy during  his life  time and the nominee acquires  no sort  of interest  in the policy during the life  time of the holder. If that is so, on the death of the policyholder the amount payable under the policy becomes part  of  his  estate  which  is  governed  by  the  law  of succession  applicable   to  him.  such  succession  may  be testamentary or  intestate. The  tenuous  character  of  the right  of   a  nominee  becomes  more  pronounced  when  one contrasts the provisions of Section 39 with that of 993 Section 38. Section 39 of the Act was not intended to act as a third  mode of  succession provided  by  the  stature  and incorrectly styled  as "statutory  testament" by  the  Delhi High Court. [998 C-E]      1.3 The  language of  Section 39  of the Act is neither capable of  altering the  course of succession under law nor can be said to have equated a nominee to an heir or legatee. [999F]      S. Fauza  Singh v.  Kuldip Singh  & Ors. AIR 1978 Delhi 276; Mrs.  Uma Sehgal  & Anr. v. Dwarka Dass Sehgal and Ors. AIR 1982 Delhi 36; overruled.      Rama Bhallav  Dhandhania v. Gangadhar Nathmall AIR 1966 Cal.  275;  D.  Mohananardu  Mudaliar  and  Anr.  v.  Indian Insurance and  Banking Corporation  Ltd., Salem and Anr. AIR 1957 Madras 115; Sarojini Amma v. Neelakanta Pillai AIR 1961 Kerala 126,  Life Insurance  Corporation of  India v. United Bank of  India Ltd.  & Anr.  AIR 1970  Cal. 413; Raja Ram v. Mata Prasad and Anr. AIR 1972 All. 167; Mallidei and Anr. v. Kanchan Prana  Dei AIR 1973 Orissa 83; Lakshmi Amma and Anr. v. Saguna  Bhagathi &  Ors. ILR  1973 Karnataka 827; Atmaram Mohanlal Panchal  v. Gunavantiben  and Ors. AIR 1977 Gujarat 134 approved.      Karuppa Gounder  & Ors.  v. Palaniammal & Ors. AIR 1963 Madras 245;  B. M.  Mundkur v. Life Insurance Corporation of India  and   Ors.  AIR   1977   Mad.   72,   discussed   and distinguished.

JUDGMENT:      CIVIL APPELLATE  JURISDICTION: Civil  Appeal No.  96 of 1972.      From the  Judgment and  Order dated 23rd December, 1971 of the  High Court  of Judicature  at  Allahabad  in  Second Appeal No. 3082 of 1971.      Yogeshwar Prasad, Mrs. Rani Chhabra and S. K. Bagga for the Appellants.      B. R.  Agarwala, R.  H. Pancholi  and Ms. Vijayalakshmi Menon for the Respondent.      The Judgment of the Court was delivered by      VENKATRAMIAH, J.  The short  question which  arises for consideration in  this appeal  by special leave is whether a nominee of  a life  insurance policy under section 39 of the Insurance Act,  1938  (Act  No.  IV  of  1938)  (hereinafter referred to  as ’the  Act’) on  the assured  dying intestate would become  entitled to  the beneficial  interest  in  the amount received  under the  policy to  the exclusion  of the heirs of the assured. 994      The facts  leading to  this appeal  are these:  One Jag Mohan Swarup  who was  governed by the Hindu Succession Act, 1956 died intestate on June 15, 1967 leaving behind his son, Alok  Kumar   (plaintiff  No.   2),  his   widow  Usha  Devi (defendant) and his mother Sarbati Devi (plaintiff No. 1) as his  heirs.  He  had  during  his  lifetime  taken  out  two

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insurance policies  for Rs.  10,000 each  and had  nominated under section 39 of the Act his wife Usha Devi as the person to whom the amount was payable after his death. On the basis of the  said nomination,  she claimed  absolute right to the amounts payable  under the  two policies to the exclusion of her son  and her  mother-in-law. Thereupon Sarabati Devi and Alok Kumar  (minor) represented  by his next friend Atma Ram who was the father of Jag Mohan Swarup filed a suit in Civil Suit No. 122 of 1970 on the file of the Ist Additional Civil Judge. Dehradun  for a  declaration to  the effect that they were together  entitled to 2/3rd share of the amount due and payable under the insurance policies referred to above. Usha Devi, the  defendant resisted  the suit.  Her contention was that on  the death of the assured, she as his nominee became absolutely entitled  to the  amounts due under the insurance policies by  virtue of section 39 of the Act The trial court dismissed the suit. The first appeal filed by the plaintiffs against the  decree of  the trial court was dismissed by the District Judge,  Dehradun. The  second appeal  filed by them against the  judgment of  the District Judge before the High Court of  Allahabad was  dismissed in  limine under Rule 11, Order 41  of the  Civil Procedure  Code. The plaintiffs have filed  this  appeal  after  obtaining  special  leave  under Article 136 of the Constitution.      The only  question which requires to be decided in this case is  whether a  nominee under section 39 of the Act gets an absolute  right to  the amount due under a life insurance policy on  the death  of the  assured. Section 39 of the Act reads:           "39. Domination  by policy-holder.- (1) The holder      of a policy of life insurance on his own life may, when      effecting the  policy or  at any time before the policy      matures for  payment, nominate the person or persons to      whom the  money secured  by the policy shall be paid in      the event of his death:           Provided that  where any  nominee is  a minor,  it      shall be lawful for the policy-holder to appoint in the      prescri- 995      bed manner  any person  to receive the money secured by      the policy  in  the  event  of  his  death  during  the      minority of the nominee.      (2)  Any such nomination in order to be effectual shall           unless it  is incorporated  in  the  text  of  the           policy itself,  be made  by an  endorsement on the           policy communicated  to the insurer and registered           by him  in the  records relating to the policy and           any such  nomination may  at any  time before  the           policy matures for payment be cancelled or changed           by an  endorsement, or  a further endorsement or a           will, as  the case  may be,  but unless  notice in           writing of  any such  cancellation or  change  has           been delivered  to the  insurer, the insurer shall           not be  liable for  any payment  under the  policy           made bona  fide by  him to  a nominee mentioned in           the text of the policy or registered in records of           the insurer.      (3)   The insurer  shall furnish to the policy-holder a           written acknowledgement  of  having  registered  a           nomination or  a cancellation  or change  thereof,           and may  charge a  fee not exceeding one rupee for           registering such cancellation or change.      (4)   A transfer  or assignment  of a  policy  made  in           accordance with  section  38  shall  automatically           cancel a nomination:

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         Provided that  the assignment  of a  policy to the      insurer who bears the risk on the policy at the time of      the assignment,  in consideration  of a loan granted by      that insurer  on the  security of the policy within its      surrender value,  or its  reassignment on  repayment of      the loan  shall not  cancel  a  nomination,  but  shall      affect the  rights of the nominee only to the extent of      the insurer’s interest in the policy.      (5)  Where the  policy matures  for payment  during the           lifetime of  the person  whose life  is insured or           where the  nominee or,  if there are more nominees           than one,  all the  nominees die before the policy           matures for  payment, the  amount secured  by  the           policy shall be 996           payable to the policy-holder or his heirs or legal           representatives or  the  holder  of  a  succession           certificate, as the case may be.      (6)  Where the  nominee or  if there  are more nominees           than one, a nominee or nominees survive the person           whose life  is insured,  the amount secured by the           policy  shall  be  payable  to  such  survivor  or           survivors.      (7)  The provisions  of this section shall not apply to           any policy of life insurance to which section 6 of           the Married  Women’s Property Act, 1874 applies or           has at any time applied :           Provided that  where  a  nomination  made  whether      before or  after  the  commencement  of  the  Insurance      (Amendment) Act,  1946, in  favour of  the wife  of the      person who  has insured  his life  or of  his wife  and      children or any of them is expressed, whether or not on      the face  of the  policy,  as  being  made  under  this      section the said section 6 shall be deemed not to apply      or not to have applied to the policy."      At the  out set  it should be mentioned that except the decision of  the Allahabad  High Court  in  Kesari  Devi  v. Dharma Devi  on which  reliance was placed by the High Court in dismissing  the appeal before it and the two decisions of the Delhi  High Court  in S.  Fauza Singh  v. Kuldip Singh & Ors. and  Mrs. Uma Sehgal & Anr. v. Dwarka Dass Sehgal & Ors in all  other decisions  cited before  us the  view taken is that the nominee under section 39 of the Act is nothing more than an  agent  to  receive  the  money  due  under  a  life insurance policy  in the  circumstances similar  to those in the present  case and that the money remains the property of the assured  during his lifetime and on his death forms part of his estate subject to the law of succession applicable to him. The cases which have taken the above view are Ramballav DhanJhania v. Gangadhar Nathmall. Life Insurance Corporation of India v. United Bank of India Ltd. & 997 Anr., D. Mohanaeelu Muldaliar & Anr. v. Indian Insurance and Banking Corporation  Ltd. Salem  & Anr.,  Sarojini  Amma  v. Neelakanta Pillai Atmaram Mohanlal Panchal v. Gunavantiben & Ors., Malli  Dei and  Lakshmi Amma  Anr. v. Sagnna Bhagath & Ors., Since  there is  a conflict of judicial opinion on the question involved  in this  case it  is necessary to examine the above  cases at some length. The law in force in England on the  above question  is summarised  in Halsbury’s Laws of England (Fourth Edition), Vol. 25, Para 579 thus :           "579. Position  of third  party, The  policy money      payable on the death of the assured may be expressed to      be payable to a third party and the third party is then      prima facie  merely the agent for the time being of the

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    legal owner and has his authority to receive the policy      money and  to give  a good  discharge; but he generally      has no  right to  sue the insurers in his own name. The      question has  been raised  whether  the  third  party’s      authority to  receive the policy money is terminated by      the death  of the  assured;  it  seems,  however,  that      unless and  until they  are otherwise  directed by  the      assured’s personal representatives the insurers may pay      the money  to the  third party and get a good discharge      from him."      We shall  now proceed  to  analyse  the  provisions  of section 39  of the  Act. The  said section  provides that  a holder of  a policy  of life  insurance on  his own life may when effecting  the policy  or at any time before the policy matures for  payment nominate  the person or persons to whom the money  secured by  the policy shall be paid in the event of his  death. If  the nominee is a minor, the policy holder may appoint  any person to receive the money in the event of his death  during the  minority of  the nominee.  That means that if  the policy  holder is alive when the policy matures for payment  he alone  will receive payment of the money due under the policy and 998 not the  nominee. Any such nomination may at any time before the policy  matures for payment be cancelled or changed, but before such  cancellation  or  change  is  notified  to  the insurer if  he makes  the payment  bon fide  to the  nominee already registered  with  him,  the  insurer  gets  a  valid discharge. Such  power of  cancellation of  or  effecting  a change in  the nomination  implies that  the nominee  has no right to  the amount  during the lifetime of the assured. If the policy  is transferred  or assigned  under section 38 of the Act, the nomination automatically lapses. If the nominee or where  there are  nominees more than one all the nominees die before  the policy  matures for  payment the  money  due under  the   policy  is   payable  to  the  heirs  or  legal representatives or  the holder  of a succession certificate. It is  not necessary  to refer to sub-section (7) of section 39 of  the  Act  here.  But  the  summary  of  the  relevant provisions of  section 39  given above  establishes  clearly that the  policy holder  continues to  hold interest  in the policy during  his lifetime and the nominee acquires no sort of interest  in the policy during the lifetime of the policy holder. If that is so, on the death of the policy holder the amount payable  under the  policy becomes part of his estate which is  governed by  the law  of succession  applicable to him. Such succession may be testamentary or intestate. There is no  warrant for  the position  that section 39 of the Act operates as  a third kind of succession which is styled as a ’statutory testament’ in paragraph 16 of the decision of the Delhi High  Court in  Mrs. Uma  Sehgal’s  case  (supra).  If section 39  of the  Act is contrasted with section 38 of the Act which  provides for transfer or assignment of the rights under a  policy, the  tenous character  of the  right  of  a nominee would  become more  pronounced. It  is difficult  to hold that  section 39  of the  Act was  intended to act as a third mode  of  succession  provided  by  the  statute.  The provision in  sub-section (6)  of section 39 which says that the amount  shall be payable to the nominee or nominees does not mean  that the  amount shall  belong to  the nominee  or nominees. We  have to  bear in  mind here  the special  care which law  and judicial  precedents take  in the  matter  of execution and  proof of  wills  which  have  the  effect  of diverting the  estate from  the ordinary course of intestate succession and  that the  rigour of  the rules governing the

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testamentary succession  is not relaxed even where wills are registered.      As observed in the Full Bench decision of the Allahabad High Court  in Raja  Ram v.  Mata Prasad  & Anr.  which  has interpreted 999 section 39  of the  Act correctly, the judgment of that High Court in  Kesari Devi’s  case (supra) related to a different set of  facts. In  Kesari Devi’s  case (supra)  the  dispute arose  regarding   the  person   who  was  entitled  to  the succession certificate  in respect  of  the  amount  payable under a  life insurance  policy which  had been taken out by the assured  between the  widow of the assured and the widow of the nominee under section 39 of the Act. On going through the judgment  in Kesari Devi’s case (supra) we feel that the Court in  that case paid little heed to the earlier judicial precedents of  its own Court. The decision of the Full Bench in Raja  Ram’s case  (supra) set  at rest  all doubts  which might have  been created by Kesari Devi’s case (supra) about the true  import of  section 39  of the Act in so far as the High Court of Allahabad was concerned.      In Fauja  Singh’s case  (supra) there is reference only two three  cases-Life  Insurance  Corporation  of  India  v. United Bank  of India  Ltd. (supra),  Matin v. Mahomed Matin and Kesari  Devi’s case  (supra). The  Court  expressed  its dissent from  the  Calcutta  decision  on  the  ground  that decision had not considered sub-section (6) of section 39 of the Act. The Lahore case was one decided before the Act came into force.  The distinguishing  features of  Kesari  Devi’s case (supra)  are already  mentioned. Otherwise there is not much discussion  in this case about the effect of section 39 of the Act.      We have  carefully gone  through the  judgment  of  the Delhi High  Court in Mrs. Uma Sehgal’s (case) supra. In this case of  the  High  Court  of  Delhi  clearly  came  to  the conclusion that  the nominee had no right in the lifetime of the assured  to the amount payable under the policy and that his rights would spring up only on the death of the assured. The Delhi  High Court having reached that conclusion did not proceed to  examine the  possibility of  an existence  of  a conflict between  the law of succession and the right of the nominee under  section 39 of the Act arising on the death of the assured and in that event which would prevail. We are of the view  that the  language of section 39 of the Act is not capable of  altering the course of succession under law. The second error  committed by the Delhi High Court in this case is the  reliance placed by it on the effect of the amendment of section  60(1) (kb)  of the Code of Civil Procedure, 1908 providing that all moneys payable under a 1000 policy of insurance on the life of the judgment debtor shall be exempt  from attachment  by his creditors. The High Court equated a  nominee to  the heirs and legatees of the assured and proceeded  to hold  that the  nominee succeeded  to  the estate with all plus and minus points’. We find it difficult to treat a nominee as being equivalent to an heir or legatee having regard  to the  clear provisions of section 39 of the Act. The  exemption of  the  moneys  payable  under  a  life insurance policy under the amended section 60 of the Code of Civil Procedure instead of ’devaluing’ the earlier decisions which upheld  the right  of a  creditor of the estate of the assured  to   attach  the  amount  payable  under  the  life insurance policy  recognises such  a right  in such creditor which he  could have  exercised but for the amendment. It is because it  was  attachable  the  Code  of  Civil  Procedure

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exempted it  from attachment in furtherance of the policy of Parliament in making the amendment. The Delhi High Court has committed another error in appreciating the two decisions of the  Madras   High  Court  in  Karuppa  Gounder  &  Ors.  v. Palaniammal &  Ors. and  in B.M.  Mundkur v.  Life Insurance Corporation of  India  &  Ors.  The  relevant  part  of  the decision of  the Delhi  High Court in Mrs. Uma Sehgal’s case (supra) reads thus:      10.  "In Karuppa  Gounder v. Palaniammal, AIR 1963 Mad.           245 (para  13), K  had nominated  his wife  in the           insurance policy.  K died.  It was  held  that  in           virtue of  the nomination, the mother of K was not           entitled to any portion of the insurance amount.      11.  I am  in respectful  agreement with  these  views,           because they  accord with the law and reason. They           are supported by S. 44 (2) of the Act. It provides           that the  commission payable to an insurance agent           shall after  his death,  continue to be payable to           his heirs,  but if  the agent  has  nominated  any           person the  commission shall be paid to the person           so nominated.  It cannot  be  contended  that  the           nominee u/s 44 will receive the money not as owner           but as  an agent  on behalf  of someone  else vide           B.M. Mundkur  v. Life  Insurance Corporation,  AIR           1977 Mad. 72. Thus, the nominee excludes the legal           heirs." 1001      Two mistakes  committed by  the Delhi High Court in the above passage  are these. In Karuppa Gounder’s case (supra), the question  was  whether  the  amount  payable  under  the insurance policy  in question  was joint  family property or separate property  of the  assured. In  that connection, the High Court of Madras observed thus:           "But where  a coparcener  has  effected  insurance      upon his  own life,  though he  might have received the      premia from  out of  the  funds  which  he  might  have      received from the joint family, it does not follow that      the joint family insured the life of the member or paid      the premia in relation thereto. It is undeniable that a      member of  a coparcenary  may with  the moneys which he      might receive  from the coparcenary effect an insurance      upon his own life for the benefit of the members of his      immediate family.  His intention  to do  so and to keep      the  property   as  his   separate  property  would  be      manifested if  he makes  a nomination  in favour of his      wife or children as the case may be. It would therefore      appear that  no general  proposition can be advanced in      the matter  of the  insurance policy  of a  member of a      coparcenary and  that each  case must  be dealt with in      accordance with the circumstances surrounding it."      It is  obvious from  the above  passage that  the above case has no bearing on the meaning of section 39 of the Act. The fact  of nomination  was treated in that case as a piece of evidence  in support  of the  finding that the policy was not a  joint family  asset but  the separate property of the coparcener concerned.  No right based on the ground that one party was  entitled to succeed to the estate of the deceased in preference to the other or along with the other under the provisions of  the Hindu Succession Act was asserted in that case. The next error committed by the Delhi High Court is in drawing an  analogy between  section 39 and section 44(2) of the Act  thinking that  the Madras High Court had done so in B.  M.  Mundkur’s  case  (supra).  In  B.M.  Mundkur’s  case (supra), the  High Court  of Madras  instead of  drawing  an analogy between  section 39  and section  44(2) of  the  Act

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actually contrasts  them as  can be  seen from the following passage: 1002           "There   are   vital   differences   between   the      nomination contemplated under Section 39 of the Act and      the  nomination   contemplated  under  the  proviso  to      Section 44(2)  of the  Act. In the first place, the sum      assured, with which alone Sec. 39 was concerned, was to      be paid  in the event of the death of the assured under      the terms  of the  contract entered  into  between  the      insurer and  the assured  and consequently  it was  the      contractual right  which remained vested in the insured      with reference  to which  the nomination happened to be      made. It  should be  pointed out that the nomination as      well as the liability on the part of the insurer to pay      the  sum   assured  become   effective  simultaneously,      namely, at  the moment  of the death of the assured. So      long as he was alive, the money was not payable to him,      in the case of a whole life policy, and equally, having      regard to the language of Section 39(1) of the Act, the      nominee’s right  to receive the money arose only on the      death of  the assured,  Section 39  itself did not deal      with the  title to  the money  assured, which was to be      paid by  the insurer  to the  nominee who  was bound to      give discharge  to the  insurer. It was in this context      that the  Court took  the view  that the title remained      with the  estate of  the deceased,  and therefore, with      the heirs  of the deceased, that the nomination did not      in any  way affect the title and that it merely clothed      the nominee  with the  right to receive the amount from      the insurer.           12. On  the other hand, the provisions and purport      of Section  44 of  the Act  are different. In the first      place under  Section 44(1)  it was  a  statutory  right      conferred on the agent to receive the commission on the      renewal premium  notwithstanding the termination of the      agreement between  the agent  and  the  insurer,  which      provided for  the payment  of such  commission  on  the      renewal  premium.   The  statute  also  prescribed  the      qualification which  rendered  the  agent  eligible  to      receive commission  on such  renewal  premium.  Section      44(1) provides for the payment of the commission to the      agent during his lifetime only and does not contemplate      the contingency  of his  death and the commission being      paid to  anybody even  after his  death. It is S. 44(2)      which deals with the 1003      payment of  commission to  the heirs of deceased for so      long as  such insurance  agent been  alive. Thus it was      not the  general law  of  inheritance  which  conferred      title on  the heirs  of the deceased insurance agent to      receive the  commission on  the renewal premium, but it      was only  the particular  statutory provision,  namely,      Section 44(2) which conferred the right on the heirs of      the deceased  agent to  receive the  commission on  the      renewal premium. In other words, the right of the heirs      to receive  the commission  on renewal premium does not      arise under  any law  of succession  and it  is a right      directly conferred on the heirs by Section 44(2) of the      Act,  even   though  who  the  heirs  of  the  deceased      insurance agent  are will  have to be ascertained under      the law  of succession  applicable  to  him.  Thus  the      statute which  conferred such  a right  on the heirs is      certainly competent  to provide  for  an  exception  in      certain cases  and take  away such  a  right  from  the

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    heirs; and the proviso which has been introduced by the      Government of  India notification 1962 has done exactly      this in  taking away  the right  of the heirs conferred      under the  main part  of Section 44(2), in the event of      the agent,  during his lifetime, making a nomination in      favour of  a particular  person and  not cancelling  or      altering that  nomination subsequently.  If the statute      itself was  competent to  donfer such  a right  for the      first time  on the  heirs of  the deceased  agent it is      indisputable that  the statute  could  take  away  that      right under stated circumstances."      The reasons  given by the Delhi High Court in this case in support of its view are not tenable.      Moreover there is one other strong circumstance in this case which  dissuades us  from taking a view contrary to the decisions of  all other  High Courts  and accepting the view expressed  by  the  Delhi  High  Court  in  the  two  recent judgments delivered  in the  year 1978 and in the year 1982. The Act  has been  in force from the year 1938 and all along almost all the High Courts in India have taken the view that a mere nomination effected under section 39 does not deprive the heirs of their rights in the amount payable under a life insurance policy. Yet Parliament has not chosen to make any 1004 amendment to  the Act.  In such a situation unless there are strong  and  compelling  reasons  to  hold  that  all  these decisions are  wholly erroneous, the Court should be slow to take a  different view.  The reasons given by the Delhi High Court  are   unconvincing.  We,  therefore,  hold  that  the judgments of  the Delhi  High Court  in Fauja  Singh’s  case (supra) and  in Mrs.  Uma Sehgal’s  case (supra)  do not lay down the  law correctly.  They are, therefore, overruled. We approve the  views expressed by the other High Courts on the meaning of  section 39  of the  Act and  hold  that  a  mere nomination made  under section  39 of  the Act does not have the effect  of conferring  on  the  nominee  any  beneficial interest in  the amount  payable under  the  life  insurance policy on  the death  of the  assured. The  nomination  only indicates the  hand  which  is  authorised  to  receive  the amount, on  the payment  of which  the insurer  gets a valid discharge of  its liability  under the  policy, The  amount; however, can  be claimed  by the  heirs of  the  assured  in accordance with the law of succession governing them.      In view  of the  above conclusion,  the  judgments  and decrees of the High Court, the first appellate court and the trial court are liable to be set aside. They are accordingly set aside.  Since it is not disputed that the plaintiffs are under the  law of succession governing them each entitled to 1/3 share  in the  estate of  the  deceased,  it  is  hereby declared that  each of  the plaintiffs  is entitled to 1/3rd share in the amount received under the insurance policies in question and  the interest which may have been earned by its investment. The suit stands decreed accordingly.      Parties  shall,   however,   bear   their   own   costs throughout. S.R.                                         Appeal allowed. 1005